Companies seeking to expand their workforce into Canada must adhere to the country's unique labor laws, which include providing mandatory employee benefits. While global employers are required by law to contribute to Canada’s national healthcare and pension system, it is standard practice for employers to offers upplemental medical and retirement benefits. Offering comprehensive coverage and additional saving opportunities give companies a competitive advantage and help retain top talent.

Mandatory benefits, also known as statutory benefits, are required by Canadian employment law. All Canadian citizens receive medical benefits as part of the national healthcare system. Employers are responsible for meeting those requirements and making the correct contributions. Statutory employee benefits in Canada include:

·      Provincial healthcare coverage (AHCIP, OHIP, RAMQ etc.)

·      Pension contributions (CPP, QPP)

·      Employment insurance (EI)

·      Survivor insurance

·      Workers' compensation insurance

In addition to statutory benefits, employees in Canada expect supplemental benefits.While it’s not required by law, offering supplemental benefits reduces your team’s financial burden and forms an important part of an employers total compensation proposition which helps increase employee attraction and retention. It also sets your company apart as an employer of choice in a competitive hiring market. Employer’s also offer supplemental benefits to ensurecomprehensive coverage and employee satisfaction. Some common supplemental benefits in Canada include:

·      Supplemental health insurance

·      Supplemental dental & vision-care insurance

·      Group registered retirement savings

·      Employer stock purchase plan

·      Group pension contribution plan

·      Life insurance coverage

·      Accidental death & dismemberment coverage

·      Long-term disability benefits

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What are Group Benefits?

Group benefits are employer-sponsored insurance plans that provide additional coverage beyond the basic services offered by provincial health care programs. These plans are designed to cover costs that may not be covered by provincial health insurance, such as dental care, vision care, and prescription drugs. 

Role of HR:

HR departments play a crucial role in managing and communicating group benefits programs to employees. This includes: 

·      Plan Design: Working with consultantsor insurance providers to design and implement the benefits package. 

·      Enrollment and Administration: Ensuring employees understand the benefits and can enroll in the plan. 

·      Communication: Keeping employees informed about their benefits, any changes to the plan, and how to access coverage. 

·      Compliance: Ensuring the plan meets legal and regulatory requirements. 

Benefits Included:

Groupbenefit plans can include various types of coverage, such as:

·       Health andDental: Covering costs for medical appointments, prescription drugs,dental work, and vision care. 

·      Disability Insurance: Providingfinancial support to employees who are unable to work due to illness orinjury. 

·      Life Insurance: Providinga lump-sum payment to beneficiaries upon the death of the employee. 

·      Retirement Savings: Offering opportunities for employees to save for retirement through programs like GroupRegistered Retirement Savings Plans (GRRSP).

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Tax Implications:

Whether or not a group benefit is taxable in Canada depends on its type and fundingsource. Someemployer-paid premiums are taxable benefits. This includes:

• group life insurance,  
• dependant life insurance,  
• accidental death insurance and  
• critical illness insurance.   

What's more, your taxable income includes the amounts paid on your behalf. Outside of Quebec,employer-paid premiums for health insurance benefits like prescription drug coverage, eye and dental care, are not taxable. In Quebec, they are, but only on your provincial, not federal, tax return. You may also be able to claim some health insurance premiums you paid as a tax credit. 

Employer-paid short-term disability orlong-term disability premiums are not taxable benefits. But any short- orlong-term disability income replacement benefit you receive in the future willbe taxable. Conversely, if all employees pay their own short or long-termdisability premiums, any income replacement benefits they receive are tax-free. The same applies to premiums you pay for an individual policy you own. If you pay premiums yourself, using after-tax money, any benefits you receive are tax-free. 

Employer contributions to a non-group insurance plan (for an individual employee) are a taxable benefiteven if the plan is for life, sickness, accident or disability insurance. For example, an executive may negotiate individual paid participation in a health/wellness plan. This may include a private facility as part of their total compensation. The annual fee would be taxable.

Retirement benefits: Employer contributions to registered pension plans (RPPs) and deferred profit-sharingplans (DPSPs) aren’t taxable.

Please ensure that you refer to the CanadaRevenue Agency (CRA) for additional details or for up-to-date informationregarding changes in policy that might occur to the information in this section.

Importance of Group Benefits:

In a competitive job market a group benefits plan is a great way to separateyourself from the competition. Group benefits can help attract and retain employees, improve employee morale, and enhance the overall workenvironment. 

1.     For youremployees

·      Employees can get coverage at a reduced cost compared to mostpersonal plans

·      Help protect your employees and their family’s health

·      Help reduce financial stress if something happens

2.      For your company

·      Help improve morale and increase productivity

·      Can be less expensive than providing salary increases as there are noadditional increases in CPP, EI or Workers’ Compensation rates

·      Premiums paid on group benefits can be written off as a business expense

·      Maintain a competitive edge in the job market

·      Attract and keep key employees

Customizing group health insurance plans to meet different employeeneeds

Beneplan offer customizableplans for diverse employee needs based on their relative size and plan featuresdesired. Employers can choose coverage levels for prescription drugs, dentalcare, vision care, and paramedical services like physiotherapy and massagetherapy.

Some plans include optional add-ons, such as critical illness ordisability insurance. Having a flexible health spending account (HSAs) alsoallow employees to allocate funds toward specific medical expenses.

To decide the best group health insurance plan, different factors likecoverage options, customer service, pricing, and reputation must be considered.At Beneplan we use our 30+ years of industry expertise and a very uniquecooperative refund methodology, to deliver best in class, bespoke group healthinsurance solutions.

Contact your group benefits advisor/broker to arrange for a free,no obligations overview and consult on employee benefits packages for yourteam. Whetheryou have a team of five or a growing business, we can provide customized quotesthat suit your needs.

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